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FOREX-Dollar stalls as geopolitical storm quietens
August 11, 2014 / 11:17 PM / in 3 years

FOREX-Dollar stalls as geopolitical storm quietens

* G3 currencies off to a flat start in Asia

* No major events to stir markets overnight

* German ZEW survey up next

By Ian Chua

SYDNEY, Aug 12 (Reuters) - The U.S. dollar started trade in Asia on Tuesday in familiar territory, holding flat after a listless session overnight void of any meaningful economic data or market-moving events.

The dollar index was flat at 81.455 after drifting in a 82 tick-range on Monday, a far cry from Friday’s 336 tick-range.

Traders said the index was looking toppish given last month’s rally that swept it to a succession of 2014 peaks and the market will need fresh impetus to push it further still.

Monday had nothing to excite dollar bulls and left markets in a watchful mood as geopolitical risks persisted.

In Iraq, a new political crisis was brewing just days after Washington launched its first military action against insurgents from the Islamic State.

In Ukraine, NATO warned Russia against using humanitarian help as a pretext for an invasion.

Still, there was no flare up in tensions, keeping the safe-haven yen off the highs seen late last week.

The dollar bought 102.22 yen, off Friday’s low of 101.51, while the euro fetched 136.82 yen, still well off a trough of 135.73 plumbed on Friday.

The geopolitical concerns and sanctions against Russia will probably be reflected in a closely watched survey on German morale due later in the day, analysts at BNP Paribas said.

“We expect the headline expectations measure to fall to its lowest levels since the immediate aftermath of the EUR crisis in early 2013,” they wrote in a note to clients.

Such an outcome might keep the euro under pressure, traders said. The common currency last traded at $1.3386, still struggling after hitting a nine-month low of $1.3333 a few days ago.

The Canadian dollar was perhaps one of the best performing major currencies overnight, thanks to an unexpected rise in the country’s housing starts.

Canada’s housing starts rose to 200,098 last month from a upwardly revised 198,665 units in June, beating forecasts for 193,000.

That helped the loonie climb 0.5 percent to C$1.0923 per U.S. dollar. (Editing by Shri Navaratnam)

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